UCPB extends P326-M term loan

MANILA, Philippines - The United Coconut Planters Bank (UCPB) is providing Davao Del Norte Electric Cooperative (Daneco) with a P326-million term loan to upgrade of the power distribution firm’s facilities, thus enabling the electric cooperative to meet the growing demand for electricity in its service areas.

Daneco will use the loan to double the capacity of two of its 10 substations from 10MVA to 20MVA, and rehabilitate its power lines, transformers and other distribution facilities and equipment.

The upgrade will benefit the 125,900 households, commercial and industrial establishments, government offices and public utilities.

Daneco is one of the biggest electric cooperatives in the country; it distributes electricity to 374 barangays in Davao del Norte, Tagum City, the Island Garden City of Samal and Compostella Valley. 

Power usage in these areas has been growing at an average of eight percent a year on account of the rise in business activities and the increase in the number of households there.

In particular, the Island Garden City of Samal, with its many fine white sand beaches, dugong sanctuary and numerous other natural attractions, has been experiencing a surge in investments in tourism-related infrastructures and in residential property developments.

Davao del Norte and Compostella Valley are the Philippines’ leading producers of banana, a major export crop that generated $250 million in foreign exchange earnings for the country last year. The former is also one of Mindanao’s main rice granaries.

The LGU Guarantee Corp. (LGUGC), under its regular guarantee program and the Electric Cooperative-Partial Credit Guarantee (EC-PCG) program, has guaranteed the term loan.

LGUGC is a private company established by the Bankers Association of the Philippines (BAP), the Development Bank of the Philippines (DBP) and the Asian Development Bank (ADB) to provide guarantee cover for loans to local development projects.

Daneco is the third power cooperative in Mindanao to receive financing from UCPB. The two others are Surigao del Norte Electric Cooperative and Cotabato Electric Cooperative, which received loans amounting to P85 million and P25 million, respectively, to expand and upgrade their distribution facilities.